Editorial: How much worse can it get?

Friday

Jul 31, 2009 at 12:01 AMJul 31, 2009 at 5:04 AM

We hate being right. Not really, but we wish we were wrong in this instance. At the beginning of the month we wrote “Illinois cannot keep deferring pension payments and hope one day everything will be all right — it won’t.” Alas, Illinois’ budget agreement calls for the state to issue $3.5 billion in bonds to make required payments to public pension systems.

We hate being right. Not really, but we wish we were wrong in this instance. At the beginning of the month we wrote “Illinois cannot keep deferring pension payments and hope one day everything will be all right — it won’t.”

Alas, Illinois’ budget agreement calls for the state to issue $3.5 billion in bonds to make required payments to public pension systems.

That borrowing from tomorrow to pay for today is going to cost the state extra. Fitch Ratings dropped Illinois’ credit rating by two notches Wednesday because the state relies on borrowing rather than making the cuts and structural changes needed for long-term fiscal health. That means the state will have to pay more in interest on the money it borrows.

Moody’s Investor Service also is looking at downgrading the state’s ratings.

A paragraph from Fitch’s report: “The extent of the current fiscal problem has been clear for several months as revenue estimates were downsized; however, comprehensive solutions have been repeatedly delayed.” Looks like something we might have written.

There is hope. The $26 billion spending plan the General Assembly passed is only meant to last until fall, when lawmakers will meet again to talk about a real budget.

Here’s our suggestion, which we’ve repeated plenty: Stop spending what we don’t have. Live within your means. Say no to more crippling obligations.